White Collar Exemption Regulations Move to Final Review Stage

On Monday, March 14, 2016, the U.S. Department of Labor released its final overtime exemption rule to the White House Office of Management and Budget (OMB). The OMB will now conduct its concluding review of the regulation, which, once approved, will be published in the Federal Register. The OMB has up to 90 days to complete its review, though the average time frame is approximately 60 days.

The revised regulations are expected to increase the minimum salary required for exemption as an executive, administrative, or professional employee; increase the minimum total annual compensation required for exemption as a “highly compensated employee”; and establish a mechanism for automatically updating these minimum salary and compensation levels going forward. See our June 30, 2015 blog post for more details. Once the final rule is published, employers are likely to have at least 60 days to come into compliance before the new rules become effective.

In its Fall 2015 Semiannual Regulatory Agenda, the DOL estimated a July 2016 timeline for the publication of the Final Rule. The release of the proposed regulations to the OMB this week means the DOL is on track to possibly have the rule become official as early as this spring.